The EastAfrican 48 EAC COMMON MARKET PROTOCOL Partner states delaying key regional protocol Embedded ≥esistance and nationalistic sentiments hinde≥ compliance to the ag≥eed time f≥ames to the P≥otocol CHRISTABEL LIGAMI Special Correspondent T he East African Community member states are delay- ing implementation of the EAC Common Market Protocol, thus denying the bloc full integration, says the East African Legislative Assembly. “The biggest challenge is de- lays and commitment in harmonising national laws to fit with the requirements of the protocol,” said Peter Mathuki, Kenyan member of EALA and chair of the Committee on Legal, Rules and Privileges. “Partner states must co-op- erate on harmonising policies; they must also share information and experiences on how to regulate markets,” he added. Mr Mathuki said that, over the past seven years, reforms in the EAC have focused on simplifying regulatory processes. The establishment of the EAC Common Market Protocol is in line with the provisions of the EAC Treaty. It provides for “Four Freedoms:” The free movement of goods, labour, services, and capital. The plan is to implement the protocol established hurdles obstructing the effective running of businesses in the region,” said Andrew Luzze, East African Business Council chief executive. The EALA report also shows that Kenya has also amended its immigration laws but is yet to amend the labour laws adopted in 2007 to reflect the requirements of the Common Market protocol. In Rwanda, a law establishing a competition authority has been enacted but is yet to be gazetted. Burundi is finalising the establishment of a national competition commission while Uganda has drafted a national competition policy and law, which is awaiting Cabinet approval. Article 16 of the protocol pro- Presidents Pierre Nkurunziza, Jakaya Kikwete, Uhuru Kenyatta, Yoweri Museveni and Paul Kagame. Pic: File in 2010 progressively until December 31. According to a report by EA- LA, 63 measures out of 500 key sectoral laws and regulations of partner states have been identified by the committee as inconsistent with the Common Market Protocol. Seventy-three per cent of these are exclusively related to professional services. In terms of movement of capi- tal, only two — external borrowing and repatriation of proceeds from sale of assets — out of 20 capital operations are free of restrictions in all partner states. Kenya Private Sector Alliance (Kepsa) chairman Vimal Shah said that only when the protocol is fully implemented, the larger integrated market encourage more investment. According to Mr Mathuki, the challenge in implementing WAY AHEAD EALA says the region must make more rigorous decisions to meet the December deadline for the full implementation of the EAC Common Market Protocol. The regional assembly recommends that the EAC partner states and relevant the protocol is that it did not provide for sanctions for noncompliance. In Kenya, 17 operations were found open (no restriction), Rwanda 15, Uganda 15, while in Burundi and Tanzania only four operations were found open. The report further revealed that a total 63 non-conforming measures to commitments to Q &A WI T H I VAN ME N E Z E S Diageo: Af≥ica is a g≥eat feede≥ of talent to ou≥ global business The chief executive of Diageo Plc was in Nairobi recently to visit its brewing business in East Africa and assess new trends. He spoke to JAINDI KISERO There’s a perception that Diageo’s operations in the region are top-heavy with expatriates. What are your views on development of local talent? These perceptions misrepresent the reality. We are a local company here. But we are also a global business with a workforce of 360,000 spread around 180 countries. Developing local talent is a top priority for Diageo Plc. Currently, we have 20 Kenyans working in senior management positions outside this country. The policy of this business is to have senior leadership that reflects the markets where we operate. But the perceptions persist. Those perceptions are not supported by facts and statistics. Cur- rently, 70 per cent of the senior management of our business on the African continent is African. This number has progressed from 40 per cent since about 10 years ago. We look at Africa as a great feeder of talent to our global business. That is what we believe and practise as a group. I am a strong believer in moving our senior leadership to work in different environments. International experience is invaluable. Your business in this region is more or less mature. The formal market for alcoholic beverages does not appear to present major opportunities for growth. We remain very optimistic about the growth of our business in this region. This is reflected in the capex spend we have committed here. For your informations, we have just spent Ksh1 billion ($10.8 million) in capex on our business here. What is the basis of your optimism? When you look at the demog- raphy, urbanisation trends, the number of young people entering legal drinking age and GDP growth trends, you see sustainable growth opportunities for our business in the region. With the improvements we are seeing in terms of better infrastructure and ease of doing business, we see tremendous opportunities. The business here appears focused on selling non-core assets. The sale of the glass company (Central Glass Industries) was a strategic decision. Glass making requires different skills and capabilities. It made strategic sense for us to offload the glass making company. I see this market experiencing double-digit growth in the medium term. Our focus will be on new innovations to develop and support trading in our products. We will deliver better experience and bet- ter value at every stage of the value chain. During my stay, I visited several retail outlets, where some of our brands are sold. Innovative ways of partnering with retail outlets remains a top priority for us. Excise duties and relations with the governments? I firmly believe in constructive engagement with the government. How to share the pie between the farmer, who grows barley, distributors and retailers, and the government’s revenue needs. It must be a win-win situation for both the government and the business. Are you considering consolidation of the business in the region? We have a strong footprint in the region, which gives us sufficient scale to grow organically. We will be looking at acquisition opportunities when they come. stakeholders increase sensitisation and awareness of all the categories of citizens in East Africa including the private sector, civil society organisations and faith-based organisations of their roles and obligations under the protocol and enhance the roles of the media. liberalise services trade. Out of 63, Tanzania had 17, Kenya 16, Rwanda 1, and Burundi 9 Under key obligations on the free movement of goods, most partner states were found compliant though non-tariff barriers remain a challenge. “Although some partner states have tried to eliminate trade barriers, there are still vides that the partner states guarantee the free movement of services supplied by nationals within the Community. Burundi has embarked on a review of some of the domestic laws and regulations that impose restrictions on free movement of services. Uganda has developed a Na- tional Implementation Strategy, which together with the National Development Plan and National Trade Policy will guide the implementation of the Common Market Protocol. The EALA report says there is still embedded resistance and nationalistic sentiments in complying with the agreed time frames to the protocol. “To overcome the challenge, EALA will come up with a regional law and or Act on Common Market implementation so as to streamline and guide implementation at country level,” said Mr Mathuki. BUSINESS MAY 9-15,2015